What happens once I invested in a startup?

tpr Train Asked on September 7, 2015 in Other.
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Offer to bring value and resources

A great founding team funded by strategic investors is a lethal combination. Funding is an essential resource for the birth and growth of a company, but having an investor who brings strategic value to the company becomes an invaluable asset and competitive advantage. Ask yourself, if you have market experience and/or industry knowledge that could benefit the founding team? Are there any introductions you could make to strategic partners, sales leads, or other critical game changers?  Before doing anything, we recommend getting in touch with the founder to see if what you would like to do will actually add value. It has to be mutually agreed upon, otherwise it can be distracting to the entrepreneur if it doesn’t help their bottom line or is not what they are working on at the moment.

Build a strong relationship with the entrepreneur

The great startup investors take the initiative to build a relationship with their portfolio entrepreneurs and learn about their motivations. In any long-term relationship, trust and respect are its founding blocks, especially knowing that tough times are likely ahead as the startup moves through the growth phases. A consistent relationship will make it that much easier for the startup to persevere with the right support team cheering them to the finish line.

Set communication expectations immediately

An important, but sometimes overlooked practice is ongoing communication between entrepreneurs and investors about notable updates, strategic direction and even challenges. The worst thing an investor can do is distract startups from the normal course of business for an on-demand report of partial or non-existent data because they want it.  Successful investors set expectations in the beginning – which means that you can look forward to hearing from the founders on the mutually agreed terms – so that you can stay updated and entrepreneurs can anticipate it with regularity.

acr30 Expert Answered on September 7, 2015.
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